Sunday, 31 August 2008

Saturday, 30 August 2008

Screams the headline in The Sun*, accompanied by a photo of six babies, only three of which appear to be white *sigh*.

I can't find the ONS press release, but this bit is worth repeating (assuming it is correct):

Almost all Asian babies (96 per cent) were born to married parents, compared with one third in the Caribbean group and 51 per cent in the white British category. The number of births by single mums was also highest in the Caribbean group — 20.5 per cent — followed by African (13 per cent) and white British (seven per cent).

OK, so 20.5% of black babies are born to single mums, so 79.5% are born to married parents (33.3%) or to cohabiting parents** (by subtraction 46.2%). Then there's the statistic paraded in The New Statesman: "59 per cent of black Caribbean children are looked after by a lone parent"..

That means, again by subtraction, that about half of all black parents who were married or cohabiting when a baby is born have split up (20.5% born to single mums ab initio plus half of 79.5% = 60.25%). That doesn't necessarily mean 'half will split up by the time the child has reached adulthood', it could mean that they all have split up by the time the child reaches adulthood. It could also mean five-sixths*** of those parents allegedly cohabiting were basically lying (for whatever reason) and who split up shortly after the birth. Or maybe, 46.2% genuinely are cohabiting (and remain together), but five-sixths of them fancy that extra £220 a week that the welfare system offers them if the mother claims to be a single mum. Who knows?

Just sayin', is all.

* Interestingly, The Daily Mirror runs the same story under the headline "Less than two thirds of babies are now white British" and concludes "... which is brilliant."

** i.e. the mother knew the 'father' well enough to be able to put his name on the birth certificate.

My previous post ended up offputtingly lengthy (it is Saturday, after all), so here's the summary:

If we want to stop holding companies relocating from the UK to Ireland, the best and simplest solution is to exempt dividends from overseas subsidiaries from corporation tax, which is what most other European countries do. The fall in corporation tax revenues would be about £1 billion per annum (or 0.16% of all government tax receipts), which might be more than offset by the increase in other UK revenues (salaries, PAYE, office rents etc).

Asset management firm Henderson and engineering group Charter have followed other companies in announcing plans to relocate to Ireland for tax reasons, rekindling fears of an exodus of British businesses. Others are considering their options, including Brit Insurance, which said this week it was "actively considering the issue of tax domicile". Henderson said yesterday it would set up a new holding company in Ireland to keep its tax rate to about 20%*. The company has enjoyed a low tax rate in recent years but this is due to rise next year to the normal UK corporation tax rate of 28%."

George Osborne, who doesn't understand tax has reacted with tiresome predictability:

George, the Shadow Chancellor, blamed the exodus on the confusion created by Labour's dithering over the business tax regime and the fact that we have some of the highest corporate tax rates in the EU**. He called on Darling to adopt our plans to reduce the main rate of corporation tax from 28% to 25% and simply [sic] the business tax system***

Sorry, that is inaccurate. Lord Forsyth pointed out [in the tax reform paper that he did for George Osborne] two years ago exactly how to fix this issue at minimal overall cost (approx £1 billion per annum or thereabouts static tax loss). The relevant background, from the point of view of the holding company of an international group (with relatively little UK or Irish-source income, e.g. Charter) is as follows:

There are two ways of taxing dividends from overseas subsidiaries;

1. Exempt them entirely (or exempt 90% or 95%, possibly with a disallowance for interest costs if they relate to the investment overseas), which is what most European countries do, or...

2. Tax them at the normal rate, with a credit for underlying overseas tax, which is what the UK and Ireland do. Obviously, there are lots of countries with an effective rate of less than 28% but very few with an effective rate less than 12.5%, so in practice, the Irish-resident holding company of an international group pays little tax in Ireland (its subsidiaries pay the same amount of overseas corporation tax, of course)

Lord Forsyth's solution**** (perfectly sensible and long adopted into the MW manifesto) is to do like most other European countries and just exempt dividends from overseas subsidiaries entirely, this would on the face of it reduce corp tax receipts by £1 bilion (the net corp tax, once reduced by credit for overseas tax) but of course we'd make up most of that in other taxes (like PAYE and so on).

There is absolutely no need to cut UK corporation tax to 12.5%. Ireland got away with it because it is a small country (4 million pop.) so if it loses half the revenue from domestic companies, it can make this back by getting holding companies to relocate there - it is a tax haven.

This scam would not work for the UK because there are simply not enough international holding companies to go round*****. So we'd lose more than we'd gain by halving corporation tax - but the cost of exempting overseas dividends is well worth paying.

Further, if you want to cut taxes on business in the UK, it's VAT and Employer's national insurance (that between them raise three times as much as corporation tax) that are the real killers.

* All this explains why Henderson would expect its overall tax rate to fall to 20%, not all the way down to 12.5%; 20% is presumably the average rate that all its overseas subsidiaries pay.

** A tiresome and irrelevant factoid. I could reply that 28% would be the lowest rate of all G7 countries (assuming the rates haven't changed since I researched this post).

*** I agree that, for a given total level of taxation, dithering is bad and simplicity is good. I am a simplification campaigner if nothing else.

**** Another really good bit in Lord Forsyth's report was scrapping the 10% income tax band and just increasing the personal allowance by £2,000. There was plenty of nonsense though.

***** For example, UK corporation tax receipts approx £40 billion, Irish corporation tax receipts approx £4 billion. If we halved our corporation tax rate we'd 'lose' £20 billion (ignoring Laffer effects, which would be minimal as 28% is not particularly high, historically) and gain, what, £2 billion? Would we be able to get half of all Irish corporation tax payers to relocate to the UK?

Friday, 29 August 2008

Having little or no interest in* the outcome of the contest between The Authoritarian Interventionist Protectionist and The Other Authoritarian Interventionist Protectionist, I have followed Becky's lead and added SP's delightful visage to my side bar.

More judicious manipulation of the stat's in the press release triggered this story, also parrotted in The Daily Hatemail, who top it with that classic journalistic flourish "Cocaine and Ecstasy deaths up 1,200% since records began in 1993".

Excerpt: The Office For National Statistics figures show drugs poisoning killed 2,640 people in England and Wales last year, up 2.7 per cent from 2006. Cocaine claimed a record 196 lives last year, up from just 11 when the figures were first recorded in 1993.

If you go to Table 2b on page 84 of the full report, it says that there were 1,958 deaths where only one drug was mentioned on death certificate. The figures given add up to 1,605; the ones that mention an illegal/non-prescription drug add up to a princely 762 (if I've classified them correctly).

Horrifying is the number of deaths (167) from methadone, which is supposed to be a legal/safe substitute for heroin/morphine (587 deaths), especially as ten times as many people take heroin (according to that Horizon programme). MDMA/Ecstasy looks like a pretty safe bet (28 deaths out of half a million people who take it), but as ever, cannabis is tip-top of the list of safe drugs - one or two deaths out of millions who enjoy it regularly. Which is why The Powers That Be have to perpetuate the myth that it drives you mad; the scare story that it kills you will never stick.

BTW, the 'drugs charity' DARE mentioned in the Hatemail article is probably just another taxpayer-funded quango - it got a fair bit of money of Nottingham and Mansfield councils etc (see page 15 of the 2007 accounts). It spent a third of its income on 'education and publishing' and pissed away the rest on 'administration costs' (page 7).

Addaction (also mentioned in one or other of the articles) is a quango, as previously covered.

Vince Cable MP has let himself down badly with all this, but the Lib Dems seem to have had the only half-way decent idea (assuming that the BBC reported this correctly): "... local authorities should be able to buy unused land at a discount rate to build new social housing."

Right. Land without planning permission is nigh worthless (£5,000 per acre for agricultural = £500 per residential plot). The only reason that 'unused land' can have any value whatsoever is because the self-same local authorities have granted planning. So I wouldn't object if they bought unused land banks for say £500 per plot, not £20,000 or £40,000 or whatever they're standing at in homebuilders' balance sheets. They can then re-sell these plots in the market for £10,000 or £20,000 a pop (or whatever the market value is) to private developers, making a handsome turn.

If there happens to be a house standing on it, I wouldn't really object if they bought the house from the owner (whether from the developer or the from the reckless borrower threatened with repossession) for the build-cost (between £50,000 and £80,000 for a three bed house, depending on whom you believe). Said reckless borrower will get grief from the bank, but hey, at least they're not made homeless. Even if the reckless lender makes the reckless borrower bankrupt, he's now a council tenant and has security of tenure. Assuming the reckless borrower still has a job, the council can cheerfully charge him a market rent.

Result? This will speed up the house price crash, it will teach reckless lenders and borrowers a lesson that they won't forget for the next ten or twenty years and it will be a great source of income for local authorities, e.g. if local authority pays £65,500 for a typical house and collects more than £63 a week in rent, that's a handsome inflation-proofed return of 5% gross. Sounds like a result to me!

Realistically, the chances of this happening are close to nil, but hey, that's politicians for you.

Here's their August house price index, a few days early. There's been a bit of mucking about with seasonal adjustments - the August figure on page 3 is actually 2.75% lower than the July figure, not 1.9% as headlined. Evan Davis skewered Fionnuala Earley (Nationwide 'economist') most gloriously on the BBC.

So, let's divide the August average by the February average = 0.9175. Assuming prices continue to fall at this rate, the non-inflation/deflation adjusted total falls from February 2008 (at which stage prices were already down 2.5% from August 2007) will be:By February 2009 - down 16%By February 2010 - down 29%By February 2011 - down 40%By February 2012 - down 50%.(enter 0.9175 on your calculator, press the x key twice and keep pressing the = key).

Next question; how long will it be before prices bottom out again? Going by Nationwide's non-inflation adjusted figures, the peak of the last bubble was in 1989Q3 and the bottom in 1993Q1 = three and a half years, with another three years flatlining before it started going mad again. So on this basis, the overall fall from August 2007 to February 2011 would be about 42%, which is pretty much what the wisdom of crowds says.

Sorry chaps, that's not good enough. TW are now valuing UK plots with planning permission at £41,000 (page 74), which is still two-and-a-half times as much as Barratts. The FT reported this on 1 July 2008 so it's not even news.

2. TW have written off the book cost of "the George Wimpey brand that it bought last year, to the tune of £816m".

Not actually quite correct, but yes, they paid £816 million more than GW is now worth, so they have to write off the difference, which is what I said they'd have to do in my earlier post.

Tuesday, 26 August 2008

I covered this topic a while ago here, but it's always worth revisiting:

A Communities and Local Government spokesperson said that reforms to empty property relief were "aimed at ensuring a fairer balance between incentives to re-let property, and giving property owners a period of relief while they manage vacancies. This follows recommendations by independent experts to encourage the most efficient use of land..."

The Land Value Taxers have always said that if you want to "encourage the most efficient use of land" (i.e. build the biggest building possible) the best thing you can do is to tax the site value and ignore the value of buildings and improvements; if you tax buildings, so goes the theory, there'll be fewer buildings. Only it's not just theory is it? This is what actually happens. Or as Dearieme (no Land Value Taxer he!) said in the comments to my earlier post, "Have the stupid f***ers never heard of the Window Tax?".

And what's this crap about 'giving property owners a period of relief'? Do banks give commercial landlords a 'period of relief' if they can't find tenants? I think not. There may be some bizarre maths that says commercial landlords might be better off by knocking down buildings, but seeing as economics is about putting things to their optimum use, a tax system that encourages this is clearly fundamentally flawed.

Which leads the discussion on to vacant new-built but unsold residential property. It appears that there is an exemption (Class C) for 6 months after completion, so all the developer has to do is leave the new properties not-quite-finished, hopefully they won't be knocking them all down again.

Obnoxio covered this latest example of rent-seeking by the Race Relations Industry most admirably here, complete with revealing photo of said Dr Campbell!

My favourite bit is this: Dr Campbell told the BBC ... "And we have to ask the question whether there seems to be an acceptance that if another black youth is killed they are just another one that we don't have to worry about."

You said it, mate!

The headline's a bit unfortunate too - it's not just 'cuts', is it? It's 'bullet wounds' as well, for example.

In the clip shown on telly, the miserable old harridan emphasised that The Tyre Pump Jesus was brought up by a single mother on Hawaii. Quite possibly so, but it sort of conflicts with what the internet conspiracy nutjobs are saying.

Monday, 25 August 2008

EUROPEAN Affairs Minister Dick Roche raised the prospect of a second Lisbon Treaty referendum last night, saying he believes it is "the appropriate response" to the country's continuing political crisis* ... He added: "If we want to retain our position as a constructive EU member state, we cannot simply sit on our hands, as some would have us do, and keep saying that 'No' means 'No'."

As compared to saying that 'No' means 'Yes', presumably?

Interesting is this bit: ... the Catholic Primate of All Ireland yesterday voiced fears that some Christians had voted against the treaty because the EU was becoming ever more secular in its outlook.

What is the CPAI trying to say? What's his or her personal opinion on this? Does he or she think that Christians should vote for the treaty despite the fact the EU is becoming ever more secular in its outlook? Or what?

Denis summed it up thusly: For God's sake, Cameron, just say "Even if the Irish vote 'yes' in a second referendum, I'll still hold a British referendum" and put this bloody treaty out of its misery.

Which leads us on to Hannan's First Law (discuss among yourselves). The only question remaining is, will Hannan's First Law still hold once the EU has unravelled (as all empires do) or once the EU has descended into being an expensive talking shop with an over-inflated sense of self-importance, but completely detached from real life (see also United Nations, World Bank, IMF, G7, NATO etc etc)?

For example, are general elections in Western Europe fought and lost on the question of whether a country would leave the United Nations, for example? Of course not, all politicians pay lip-service to it while completely ignoring UN resolutions in practice. Similarly, NATO membership is still a hotly debated issue in ex-Soviet countries, but does anybody know whether France are currently in or out of NATO (without looking it up)?

* Which "political crisis", exactly? They had a referendum, there's your answer, surely that makes the politicos' life that much easier, one less thing to bicker about?

This film is full of the time-honoured Moral Dilemmas, resolved on several occasions with the Immortal Line "There is Good And Bad in All Of Us. Follow Your Heart (cont. page 94)". And of course The Baddie tells Batman "Y'know, were not so different, you and me".

Morgan Freeman plays a rogue-ish but lovable sidekick (reprising his rôle in Robin Hood) and Heath Ledger plays a younger and more manic version of Hannibal Lecter. Michael Caine reprises Sir John Gielgud's rôle as The English Butler in Arthur or possibly Parker in Thunderbirds. Batman appears to be played by Damon Hill's even more likeable younger brother. The Love Interest over whom Batman and the suave DA do battle appears to be played by an aged Carrie Fisher after plastic surgery gone wrong.

I finally got round to having a cool radio/CD/MP3 player installed in the car (£90 including fitting at Halfords, very efficient) and slapped in a CD with 200 MP3 tracks on it. Hurray! Only some of them didn't play. Boo!

Why? Because a recent update to iTunes has reset the default in Preferences/Importing from 'MP3' to 'AAC', which won't work on a player set up to play MP3's on a CD. So what you have to do is go back into iTunes/Preferences/Importing and reset it from 'AAC encoder' to 'MP3 encoder'. And then delete all the AAC ones from iTunes and stick all your recent CD purchases in again and redo them as MP3, *sigh*.

Sunday, 24 August 2008

"If it's going to be the subject of such concern and such, forgive me for saying, a huge over-reaction, a little bit of the kill-joy taking some fun out of something, I think we should adopt the Oliver Cromwell puritan streak and withdraw it."

Saturday, 23 August 2008

The weather was much too nice today to pursue our favourite leisure activity of watching telly all day, but in case it turns nasty, you can always turn on UKTV History and watch The World At War. Solid. For another two days. It's repeated on UKTV History +1 in case you miss anything.

And if the weather stays fine, how about helping some newer arrivals acclimatise by taking them to a beer garden or something, while Her Indoors accompanies their daughters on a shopping spree to buy some mini-skirts?

A sentence that popped up in the gummint's lists of feeble excuses for neither having a referendum on EU membership nor a cost-benefit analysis thereof (posted here) was this:

'Our membership allows us to live, work and travel across Europe and to receive free medical care if we fall sick on holiday'.

OK. Let's look at that 'holiday' bit, let's take Spain for example. According to FCO statistics, we made 17 million visits to Spain and there were 695 hospital admissions that required consular assistance (the total figure may have been higher, but let's run with that).

Let's assume an average Brit on holiday in Spain for a week spends £300, so British tourists benefit the Spanish economy to the tune of £5,100 million. Let's also assume that an average hospital admission costs the Spanish health service £1,500 (one-and-a-half times as much as an average NHS admission), so those 695 admissions cost the Spanish health service £1 million in total, or 0.02% of the total gain to the Spanish economy.

Spain could, in principle, end this and demand that people paid their own hospital costs in full (in which case very few would dare go), or demand that people take out travel health insurance. Let's assume that this costs £10 per person and is paid to a UK insurance company. This would cut people's limited holiday budgets by £10 per person, so the total amount spent in Spain would drop from £5,100 million to £4,930 million, but the Spanish health service would collect an extra £1 million from UK insurers, boosting the overall income to a whopping £4,931 million, an overall shortfall of ... er ...£169 million.

So really this has little to do with the EU - Spain has every interest in offering free emergency healthcare to tourists and would probably continue to offer it even if we left the EU, and no doubt we would offer a reciprocal arrangement to Spanish tourists over here.

Sir, The decision by the Secretary of State for Communities to give the go-ahead to a 472ft residential tower on the South Bank, against the advice of English Heritage, an independent planning inspector and expert bodies such as the Georgian Group, ranks as an especially crass example of government philistinism.

The impact on Somerset House, one of London’s finest examples of Neoclassical architecture and a remarkably accomplished essay in English Palladianism, will be grim. Up to now, the view south from the entrance off the Strand has remained as the architect of Somerset House, Sir William Chambers, would have seen it. But now the symmetry of his river terrace will be ruined by an interloping excrescence, as the new tower pokes up over the roofline....

Robert Bargery, Director, the Georgian Group

Yup. They've even mocked up a photo to show the calamitous impact. The blue bit is the 472ft tower:

Are these NIMBYs for real? If they're worried about symmetry, shouldn't they be demanding that they grant planning for another 472ft tower a couple of hundred yards to the west-southwest (i.e. to the right on the photo) to even things up again?

I had always assumed she wasn't the marrying kind, as hinted in the lyrics to "Things will never be the same again". On an entirely trivial and personal note, that record was on the radio when one of my children was born. I still get all emotional every time I hear it. So in my mind she's always connected with new-born babies. She's also the only ex-Spice Girl to have made a couple of half-way decent records, so to sum up, all the best, Mel!

Shock horror: There are now slightly more over-60s than under-18s in the UK.

So what, frankly?

It's the ratio of productive workers-to-everybody else that matters. At present, slightly less than half the total population is a productive worker; the rest are children, students, pensioners, welfare claimants or superfluous public sector workers.

Christina Speight's take on this latest shambles... "they want to force us to have ID cards so everything can be lost in one simple operation. It will cut down the number of press reports, I suppose!".

One of the bright ideas in my Bow Group tax and welfare simplification report was that all benefits would be paid into bank accounts and banks would have to allow welfare claimants and pensioners to open basic bank accounts (on pain of losing their banking licence).

This would enable such people to pay their utilities by Direct Debit (you can have weekly or even daily Direct Debits, apparently) timed to leave the account the same day that their money goes in. That helps them save 15% or so on their utility bills.

Thursday, 21 August 2008

This Government strongly believes that the benefits of EU Membership clearly outweigh the costs. UK membership of the EU is central to the pursuit of stability, growth and employment, and firmly in our national interest, both economically and in a wider political and strategic context. Our membership of the EU has brought real benefits in jobs, peace and security. Through it, we belong to the world’s biggest trading bloc with a Single Market of over 490 million people. Half the UK’s trade is now within the EU, with an estimated 3.5 million British jobs linked to it, directly and indirectly. 57% of total British trade in goods is with the EU. 62% of our total exports go to the EU. In 2005, British investments in the EU totalled over £17bn.

The benefits are not limited to the rights of British companies to buy and sell across the Single Market. Our EU membership also allows our citizens to live, work, study and travel across Europe and to receive free medical care if we fall sick on holiday*. Improved maternity pay, the right to paid holidays and now the reduction in the cost of mobile phone calls when abroad, are just some of the practical benefits the EU has helped deliver.

A number of studies related to the costs and benefits of various aspects of the EU are available in the UK**. The Government takes account of such studies as part of its ongoing approach to EU policy issues. The Government does not therefore see the need to commission an independent cost-benefit analysis of membership of the EU.

* That last sentence reproduced more-or -less verbatim from their spin on "Why we don't need a Referendum either" ... 'Our membership allows us to live, work and travel across Europe and to receive free medical care if we fall sick on holiday'.

My Fun Online Poll with over 700 votes cast shows that the expected overall drop is 42% with a standard deviation of 11%, which is slightly larger than the statistician's rule-of-thumb that SD = highest minus lowest divided by six, however 84% of results were within one SD of the arithmetic mean, so that looks pretty solid.

It'll be interesting to re-run this in six months' time or so, to see how expectations* have changed. Maybe I ought to rephrase the question to "By how much would house prices have to fall before you as a First Time Buyer or Buy-to-let Landlord would consider buying?".

NB - the options '10%' and '20%' were included for a giggle as much as anything - average prices are already down over 10% and steaming towards 20% - but only 4% of people fell for the trap and chose one of these options.

From The Torygraph article: Under Government-backed plans to restart the housing market, councils would sell £2 billion-worth of mortgages to tens of thousands of people hit hardest by the credit crisis.

Erm, what about potential first time buyers - they've been kept off the ladder by rampant house price inflation, and now that there are signs that prices are returning to their long run average (i.e. about half where they were last year), they're going to be slapped with higher council tax bills* in order to keep house prices higher then they otherwise would be?

In any event, the whole thing is, best case, absolutely circular: Higher Council Tax tends to push house prices down and cheap loans tend to push prices up. It's almost as mad as calling for a windfall tax on North Sea companies and giving people fuel vouchers ... oh, I see.

Colonel David Collins paid tribute to staff at the three plants for the way they had responded to the increased level of operations and training. He said the factory in Crewe last year produced up to a million rifle and machine gun rounds a day, which was "quite a significant achievement".

TL's idea was much derided by some of the Land Value Taxers: this is a step in the right direction, but seeing as the artificial surf reef, assuming it works, will benefit most existing land-owners in the vicinity, why not finance the reef with LVT on land that already has planning permission? And if the reef doesn't work, there's no uplift to land values ergo local landowners won't have to pay extra. Win-win. Unless you hate surfers, of course.

*"the outlay is being entirely covered by the sale of land nearby for flats".

Bill Quango MP asked: Any ideas what the Tories plan to do with tax credits? If its what is required I fear they may face a fine for seriously overfilling their wheelie-bin.

To which I replied: Don't forget that Tax Credits is just Family Credit, (which the Tories introduced in 1987, which itself was probably just a replacement for something else), but repackaged with extra complications. The Tories will just invent dozens of additional amendments and tweaks, fill a wheelie bin or three with the daftest ones and then introduce the rest..

And here we have it! According to a pre-released speech, George Osborne will announce that the Tories will: strengthen tax credits by tackling the "couples penalty" which he says disadvantages couples who live together - and improving administration of the system. "There is absolutely no Conservative plan to in any way get rid of tax credits, indeed if anything we want to strengthen tax credits."

Further, since when does the gummint engage spambots to disseminate propaganda on 'blogs? Following the above exchange, this was posted: Ben said ... "Hi Mark, Really interesting post thanks. There's a load more links on Government legislation, impacts on tax, etc here:http://www.childcare-vouchers.net/benefits/legislation.aspxI hope it helps, thanks again,Ben.

I'd normally delete that sort of crap, but in this case I'll keep it as evidence.

Tuesday, 19 August 2008

Besides the Employer Vouchers and the Childcare Element of Working Tax Credits, there is of course the grandaddy of them all, Nursery Vouchers, introduced by the Tories in the 1990s, subjected to the usual local/national government and left/rights spats, and promptly scrapped by Labour in 1998 and replaced with ... er ... Nursery Vouchers. Only they were renamed, then rebranded Sure Start, then split off again as Early Years Funding and for the past couple of years have been known as Early Education Funding.

As an alternative to Sure Start (two-and-a-half hours free nursery a day at a State nursery for three and four year olds), which might give Mum a nice break in the morning but is no use to a woman with a job, you can choose the vouchers instead. Despite some confusion over how the amount affects your nursery bill, in practice it's relatively straightforward. All the parent has to do is tick a box and the nursery claims 39 weeks a year x 12.5 hours x £3.30 (the £ figure appears to vary by local authority), divides it by 52 and knocks £30-odd off the weekly nursery bill for kids aged three or four.

The vouchers are non-contributory, non-taxable, non-means tested, and in my experience, the scheme works fine. As The Lass started private school before she was five, her school deducted the vouchers from the first term's fees. Sweet.

So what have we got ... the vouchers worth £30 per child per week (as long as they're three or four years old); the Childcare Element of Tax Credits that are worth a maximum of £44 per child per week (much less in most cases) for an average income family (but are savagely means-tested); and Employer Vouchers which are no use to an average income family but are worth about £23 per week to a higher rate taxpayer (let's assume one working parent per child for simplicity) who qualify for next to nothing in Tax Credits.

Hey ... I've an idea, can't we scrap all the overlaps, chuck all the schemes into a pot, stir it round a bit and replace them with vouchers worth £70 a week for each child aged two to four or something?

Cuba ... is looking at watering down the generous social welfare system that has been a cornerstone of its economy for nearly 50 years, according to a senior government official.

Alfredo Jam, head of macro-economic analysis in the economy ministry, told the Financial Times that Cubans had been "overprotected" by a system that subsidised food costs and limited the amount people could earn, prompting labour shortages in important industries. "We can't give people so much security with their income that it affects their willingness to work," Mr Jam said. "We can have equality in access to education and health but not in equality of income." ...

Under Cuba's new president, Raúl Castro, the former leader's younger brother, the country has eased restrictions on bonuses that can be paid to workers and lifted bans on products such as mobile phones and DVD players. Mr Castro also decentralised the country's agricultural system and said idle land would be offered to co-operatives and private farmers to lower dependency on imported food.

Monday, 18 August 2008

"New legislation is being introduced in April 2005 to encourage more employers to offer staff support with the cost of registered and approved childcare. It aims to encourage more employers to offer support with childcare costs through salary sacrifice schemes, either in the form of [tax-free] childcare vouchers [of up to £55 per week] or direct payment schemes."

Let's assume that one of the parents agrees with their employer that their gross wages will be reduced by £55 per week and they will receive tax/National Insurance-free nursery vouchers worth £55 instead - hoping, of course to save the PAYE on £55 (=£17, not to be sniffed at, you might think). The couple also dutifully complete and submit a revised Tax Credits claim form, which is promptly and efficiently processed by HMRC. Again, ignoring the income disregard, which makes a mockery of the whole concept, this is what the net effect will be (per week):

1. The parent's net employment income goes down by £55 less PAYE, or £38 per week2. The nursery is happy to accept the £55 vouchers and reduces the weekly nursery bill by £553. The amount of £55 is deducted from nursery costs for purposes of the Tax Credit claim, but as only 80% of those costs are taken into account, the amount reimbursed via Tax Credits (before income taper) goes down by £44.4. As the couple's gross income has gone down by £55 per week, the Tax Credit income taper goes down by 39% x £55 = £21

Once the dust has settled, the couple has lost £38, gained £55, lost £44 and gained £21. Overall they are £6 worse off. As it happens, the employer saves 12.8% x £55 Employer's NIC = £7, but the overall gain of £1 is nowhere near the administrative costs and hassle involved.

* As WOAR pointed out in the comments to an earlier post "In the accounts 2006 ... income came from: Unrestricted grant received from the Association of London Government £114,116 (see p.12) and ... Department for Education and Skills Surestart Unit £330,642, Inland Revenue £15,000. There are other headings which might be public sector but it is difficult to tell - the names or headings do not make it immediately apparent."

From HMRC's Q&AQ: "Can I get help with the costs of childcare if I’m working?"A: "The childcare element is worth up to 80p in tax credit for every £1 a week you spend on approved childcare".

Woah! "Up to" sounds good, doesn't it? But you need to be earning the income first to generate the net income to pay for a nursery. Let's assume that one parent is in work and earns £20,160 per annum, the PAYE deducted is £4,562, leaving net employment income of £15,598. The other parent is at home with two young children and the household also qualifies for £3,628 in Tax Credits per annum.*

Now let's assume the non-working parent decides to go back to work and puts the two children into a nursery costing £300 a week in total** (the maximum eligible amount for Tax Credits). That parent also finds a job paying £20,160, so knows that the tax deducted will be £4,562 and the net income will be £15,598, just enough to pay for the nursery places. (Let's assume that the parent who returns to work finds a job locally, so travel costs aren't an issue, and is happy to break even on the deal because the kids are learning to socialise and the parent knows that long career breaks are bad for future earnings potential etc.)

The parents then resubmit their Tax Credit claim, and, ignoring the income disregard which shelters them for up to a year, they are now entitled to Tax Credits of £8,186.

That's £4,558 extra Tax Credits per annum*, or about 30% of their actual nursery costs. Mathematically it is impossible to get anywhere near 80%, because the Tax Credits are withdrawn at 39% of your gross income above a certain threshold, on top of 31% PAYE.

To put it another way, let's assume that:1. The £300 weekly upper limit for childcare costs for two children and also the actual nursery fees for both children go up by £4 a week, and2. Coincidentally, one parent gets a pay rise which is just enough, after deducting PAYE and adding additional Tax Credits, to cover the extra £208 nursery costs. That equates to a £140 per annum pay rise, minus 31% PAYE is additional net employment income of £99.

* And £1,634 in Chid Benefit, so PAYE paid less Tax Credits and Child Benefit is a net payment of £700 to the household. So a £10,000 tax-free personal allowance and a transferable non-working parent's allowance of £10,000 could replace the whole morass, for example.

Via Tim W comes this blindingly obvious bit of maths. At last year's peak, the typical price of a house related half to bricks/mortar and half to site value (or implied value of planning permission, same thing really). So if house prices have fallen 10% and bricks/mortar has remained constant, you'd expect site values, being a balancing figure, so have fallen by 20%.

Therefore, looking ahead, if house prices fall by one-third from the 2007 peak, site/land values will fall by two-thirds; if house prices fall by half, site/land values will be more or less wiped out.

Here's my chart showing how site/land values have changed since 1983:For a fuller explanation, see here.

Sunday, 17 August 2008

After sifting through over fifty submissions from dozens of commenters and whittling these down to six gruelling preliminary rounds, I am pleased to announce - two hundred votes later - that Britain's Daftest Double-Barrelled Place Name is ... *drumroll* ... Lickey End, submitted by Rachel Miller.

It would be nice if she dropped in to collect her justly deserved award.

NB, if you know the first thing about Lickey End, the least documented place in Britain, you might like to help the chaps at AboutBritain.com complete an otherwise completely blank page. I was the reader who cross posted this article, in case you're wondering. Will it ever appear on their site?

Saturday, 16 August 2008

Says the headline in The Guardian. OK, that's mathematically incorrect - what they are talking about is £16 bn of allowable losses that ML have booked - rightly or wrongly - through its UK subsidiaries, so the value of the tax break is 28% of that, or £4.5 bn. However, the bones of the story appear to be correctly reported, as the FT says much the same.

As somebody who works in international tax, I can only begin to guess why ML booked its losses through the UK rather than claiming them in the US, but here's what I posted at everybody's favourite retired accountant:

OK. Being realistic and simplistic about this, ML have booked a load of losses in their UK subsidiary that didn’t really relate to UK business (I think that much is uncontentious).

But this is a US bank, so what they are really trying to do is avoid US taxes. So to make use of these losses for tax purposes, in future they will also have to book a load of PROFITS in the UK that don’t really belong in the UK. I can only assume that UK rules on carry forward of losses are more generous than US rules (or else they’d have left the losses to carry forward in the US).

So on a country basis, while the losses didn’t belong in the UK, neither will the profits. If anything, it’s the IRS who are being conned here, not HMRC. So for corporation tax, from HMRC point of view it’s nothing lost. BUT, to be able to use up those losses, ML need a presence here, so they will have more UK employees paying more UK PAYE, overall it is quite possible that HMRC comes out ahead on the deal.

With my professional hat on, it seems like a very high-risk strategy to me (and they ought to sack their advisors for letting this be splashed all over the papers). The strategy only works if the IRS allow ML to cheerfully transfer future US-source profits to the UK. Don't forget that the IRS make HMRC look positively gentlemanly - under transfer pricing rules, the IRS are almost certain to turn a blind eye to the fact that losses were transferred out of their jurisdiction, but will sing a different tune once ML start making profits again and try to shuffle those offshore.

So worst case, ML will pay tax on future profits in the US (because the IRS won't let them shift profits offshore) and in the UK (because HMRC might disallow the carried forward losses on the basis that they relate to a different trade or because of some cunning re-classification between trade losses and deficits on trading/non-trading loan relationships etc.)

According to Nationwide's series of house prices since 1952, the first full year of the last crash was 1990, when house prices ended the year down 10% (not adjusted for inflation), which is roughly where we are now (in mid-2008), so comparing 1990 and 2008 seems appropriate.

There's a handy graph on page 2 of The Ministry of Justice's figures for 2008Q1 which shows that historically about two-thirds of mortgage possession claims result in a repossession order; and that in the early 1990s, about half of repossession orders resulted in an actual repossession. The number of orders that resulted in a repossession fell significantly once the house price boom was properly underway, down to barely one-eighth, which has since risen to about one-quarter.

Assuming that the ratio of actual repossessions-to-repossession orders in the early 2000s was because people found it easy to remortgage, this is the key variable!

Given that remortgaging is now much more difficult (lower values x lower LTV and higher interest rates etc), and that mortgage lenders (who are in a bit of a blind panic at the moment) are submitting mortgage claims as a first rather than last resort, I wouldn't be surprised if actual repossessions soared way above the figures for the early 1990s (average over 60,000 for 1990 - 1993), especially as the annualised 2008Q1 number of claims was already higher than the number for 1990, and the annualised number of actual repossessions for first half of 2008 was roughly the same as for 1990.

Chuck in the BTL bubble* and I'd guess anywhere up to half-a-million repossessions in the next three years, but we'll see...

* 183,000 BTL mortgages were taken out in the peak year of 2007, who have presumably little or no equity and no reason to desperately hang on to a depreciating asset.

Per a recent YouGov poll "42% of the 2,200 people taking part considered religion had a harmful effect [and only] 28% believed in God".

Hmm.

Assuming no self-selection and that atheists are, by definition, pretty indifferent about their partners' beliefs, then =0.72^2=0.52=52% of couples wouldn't want a Church wedding anyway, as both are atheists.

By subtraction, that leaves 48% where at least one partner is a god-botherer, or, again assuming no self-selection, =0.28^2=0.08=8% of all couples have two religious partners and about =2x(0.28*0.72)=40% of all couples only have a Church wedding because the skye-faerie worshipper drags t'other one down the aisle.

The alternative is to assume that there is self-selection, in which case a maximum of 28% of couples have two religious partners, begging the question, why are 20 out of 72 atheist couples getting married in Church?

Young men are turning to crime and a violent gang culture because they are losing their sense of masculinity, a minister has warned. They are being overtaken by women in the jobs market as tradit­ional male positions disappear and see crime as the way to wealth and status instead, skills [sic] minister David Lammy said.

And in the 'warped world' of 'get rich or die trying' gang culture, they can earn respect and regain their manliness by carrying a weapon, he wrote in the New Statesman*. 'An aggressive street culture rep­laces success in other spheres of life as an expression of masculi­nity,' he added. At the same time, the 'fetishis­ation' of money and the growth of consumerism was adding to pressures, the Tottenham MP said.

Mr Lammy acknowledged problems in the black Caribbean community, where 59 per cent of children are raised by lone parents, but stressed the issue affected youngsters from all races and social backgrounds. 'While there may be young men on estates missing fath­ers, there are also children in Middle Britain whose parents become strangers in a culture of long working hours,' he said.

Shorter David Lammy:"I blame crime on those people, especially women, who try to achieve something in life. The fact that black Caribbeans tend to have no sense of family values has very little to do with it"

* The full article kicks off with "We are failing miserably to provide Britain's teenage boys with meaningful occupations, worthy role models or hope for the future. David Lammy, minister for skills, on the crisis we must resolve,"

Who's "we" for f***'s sake? How is any of this my f***ing fault? Has he never heard of 'personal responsibility' or 'self-reliance'?

Thursday, 14 August 2008

"The central proposal is that all private landlords should either join a local authority accreditation scheme; become a member of one of the associations of private landlords; or let their premises through an accredited letting agent. The Government would give a central body powers to approve industry schemes and to ensure they worked effectively. It would also, as a power of last resort, be able to prevent a landlord or agent not signed up to one of the approved schemes from letting residential property."

Eagle-eyed Jim Morton in yesterday's Metro pointed out that if the police operation at the Birmingham Bulldog Bash bikers' rally cost £1.4 million and 20 weapons were seized, this worked out at £70,000 per weapon, which he reckoned was lousy value.

Fair enough - one could argue that without the police operation, more weapons may have been smuggled in, the real value is £1.4 million ÷ the number of weapons that otherwise would have been smuggled in.

But wait!

Dave Preston, Essex had a follow up letter in today's Metro:

In response to Jim Morton - the 20 weapons the police 'netted' at the bikers' rally were actually deposited in amnesty bins set up by the Hell's Angels. The police were not allowed on site, which seems to have had the desired effect of keeping violence to a minimum.

"What happens in Georgia directly affects us." Only if we allow it to do so.

"For a start, it's about energy security." Could that be because Thatcher shut down our coal mines, and by accepting and promoting the theory that carbon dioxide emissions would wreck the planet made it difficult for the industry to be re-started?

"The Baku-Ceyhan oil pipeline ... runs right through Georgia". It was put there to avoid crossing Russian territory, while also avoiding Iran and Armenia, despite the obvious fact that it would still be vulnerable to Russian attack - so what should we do, base British troops in Georgia to defend it?

"History has shown that if you leave aggression to go unchecked, greater crises will only emerge in the future". That's what Eden thought about Nasser, and look where that got us.

"... stability in the Caucasus ... is a matter for the security of Britain and our allies." Up to a point, but it could also be said about many other troubled parts of the world.

"we should accelerate the path to Nato membership for countries such as Georgia, and other democracies such as Ukraine, if that is what they wish." In other words, the Georgians et al should be given the option of committing all the present Nato members to go to war, including nuclear war, in their defence.

"The lack of clarity about Georgia's prospects of joining Nato contributed to the present crisis." The starting point was the very suggestion that these five former Soviet republics might follow the former Soviet satellite states and the former Soviet Baltic republics by first joining Nato, and then the EU.

"It encouraged Russia ... because the West was divided and uncertain." With good reason - because history has shown that making a solemn promise that you will go to war in the defence of another country can have devastating consequences.

"The knowledge that Nato membership was a real prospect would have provided Allies with greater leverage over the actions of Tbilisi's government." Actually just the rather remote prospect of Nato and EU membership seems to have gone to their heads, with the President appearing on TV flanked by the Georgian and EU flags.

"Of course France holds the EU presidency. But that is not a reason for Britain to sub-contract our entire response to the crisis to our allies." So which party started the process of sub-contracting our foreign and defence policy to the EU, under the Maastricht Treaty?

"We could be pressing for the negotiation of the strategic partnership between the EU and Russia to be suspended." Or we could press to leave the EU out of it, and instead ask the UN to convene a traditional international congress of all interested sovereign states and other interested parties to work out a new and durable settlement.

From Denis Cooper, via email (reproduced with kind permission of the fisker).

Richard Murphy sparked an interesting debate over at Tim W a year ago; he claimed that if banks etc had issued bonds that had fallen in value (because the bank's credit rating had fallen), they were allowed to reduce the value of that debt on their balance sheets, and hence book the difference as a profit, which I immediately dismissed as twaddle.

My bad!

It turns out that UK banks are now actually doing this, as evidenced by the two negative expense items of £584 million and £224 million buried away in Note 2 on page 49 of The Royal Bank of Scotland's 2008 interim results.

Altho' it seems bizarre to book this as a profit, and thoroughly underhand to bury it away like this, that is just the way that double-entry booking works, and, to be fair, at least it flags up the issue to the discerning reader.

Tuesday, 12 August 2008

I don't normally 'do' Comment-is-free (barrels, fish and all that), but this one, via Denis Cooper, is priceless:

Which returns me to the Irish referendum. Whatever the Irish thought they were voting on, the Russian military threat wasn't on the radar screen when they recently went to the polls to say 'no' to Europe. But Georgia has decisively placed the security question on the agenda - raising the stakes, and putting a great deal of responsibility on Ireland to reach an accommodation with the rest of Europe that will allow the Union to move forward without another period of anxious renegotiation.

Wasn't one of the (many) reasons for the Irish 'No' the fact that the idea of an EU-Army goes against their desire to remain militarily neutral? Why would it make the slightest teensiest scrap of difference to what Russia thinks or does whether a militarily neutral country with a population of less than 1% of the EU's total at the very Western edge of Europe is lukewarm about further EU 'integration'?

Other blogs have noted that The Goblin King was (un)usually silent during this week's Russia v Georgia military bust-up. The Russian President announced this afternoon that they were ready to declare a ceasefire, and guess who popped up on the Channel 4 News just now - once it was all over - to offer his platitudes?

Here are two highlights from new research carried out by the No Shit Sherlock! Department:

1. Migrant workers are more likely to be working as temps or in insecure work (for example not having a written contract) than any other workers.

2. Recent migrant workers are more than twice as likely as other workers to be earning less than the appropriate NMW for their age.

We could have guessed the first factoid - from simple observation of The World Around Us or by applying commonsense*. As to the written contract, are employers supposed to spend £100 million on translation services?

The second factoid is meaningless - are 1% of such workers paid less than the NMW? 10%? 50%?

* Economic migrants tend to be people with the lowest earnings potential in their own country, so as long as our worst-paid jobs pay a lot more than in their home country, they are still 'happy' to come here.

So that means only one-in-eight-thousand British tourists gets arrested (and one-in-eleven-thousand dies, whether of old age is not stated).

One-in-eight-thousand? What's the big fuss? Unfortunately there is no comparative for the previous year's visits, so we can't tell whether the arrests-per-tourist rate is up, down or stable.

And either French police are far more lenient on the Brits (highly unlikely), or the low arrest rate of one-in-a-hundred-thousand for visitors to France is because snobs go to France and chavs go to Spain.

The whole enviro-greenie movement can be adopted as a mantle for all sorts of self-interested parties, here's an fine example, subtext "Oh no, we're not selfish NIMBYs who want to dump our waste elsewhere, we're generously and selflessly concerned about The Environment".

If that £4m extra cost of transporting waste to Wrexham isn't persuasive enough, why don't Wrexham Council just up the waste charges by another few hundred quid per lorry?

The bill should give greater protection to groups such as children, the elderly and those with learning difficulties ... Labour and the Conservatives agree on the need for a new Bill of Rights ... The committee said the bill should include rights to housing, education and a healthy environment.

That sounds like a list of suggestions for more state interference and control to me. The whole thrust of the Bill of Rights 1689* is to restrict the powers of the State rather than to painfully list various individual 'rights' or causes du jour.

* The Bill is still in force. My favourite bit - as a tax simplification campaigner - is " ... levying money for or to the use of the Crown by pretence of prerogative, without grant of Parliament, for longer time, or in other manner than the same is or shall be granted, is illegal", which, if honoured, would render three-quarters of our tax laws illegal at a stroke.

Dearieme's submission 'Six Mile Bottom' was the runaway winner of the final, final heat (despite being treble- rather than double-barrelled), so the winners of the six preliminary heats are now through to The Grand Final.

When you point out how wasteful and inefficient the State sector is, the traditional Leftie retort is "Ah yes, but there is waste and inefficiency in the private sector as well".

To which the counter-retort is "Ah yes, but the consumer doesn't pay for the waste; the consumer only pays what the goods and services are worth. Plus 17.5% VAT where appropriate. For example, 'Waterworld' may have been the most expensive film to make of all time, but the film was not that brilliant that cinemas could charge people double the normal price to see it."

In case that doesn't shut them up, or they ask "Who does pay, then?" or in the unlikely event that they say "Then the poor long-suffering shareholder must bear the cost", then is useful to look at a real life example; the Blu-Ray vs HD DVD 'war'.

Sony and Hitachi spent oodles of money in developing rival formats. If you were a shareholder in Hitachi, then you have paid an element of R&D and lost your money, and if you were a Sony shareholder, the gamble has paid off nicely*. But most sensible shareholders in Japanese electronic giants would own shares in both companies, so the only question is, do the gains (future income from licensing the Blu-Ray patents) exceed the cost of developing both formats? Almost certainly yes. So the shareholders haven't really lost out either.

So yes, superficially there is 'waste' in the private sector, but it doesn't really matter.

In any event, it pales into insignificance when you read about the NHS hospital wards crawling with vermin.

* When you think of the rival formats that Sony has developed and miserably failed to market, for example MiniDisc and ATRAC (instead of MP3) and so on, they had to get lucky sooner or later.

Final thought: Mother Nature thoughtfully provided all humans (men and woman alike) with a spare erogenous zone a few inches up their bums. There is always a mirror-image problem with actual explanations for this (cf. male nipples); is it there as a handy form of natural contraception for the more adventurous woman, or is it there to make sure that the junior partner in a gay relationship has as much fun as the senior? Or both?

Either way, this simple biological fact is rather unapalatable to homophobes and prudes alike, so I'm not sure I'd ever have the nerve to finish off an argument with them on this high note. Ah well.

Friday, 8 August 2008

Repossessions were 19,000-odd in the first half of this year, and the house price crash has only just kicked off!

The article also says that 155,000 households are seriously in arrears (I have seen the figure of 300,000 recently, not sure where); which is still way short of the number in negative equity (about half a million?).

Logic says that there is an upper limit to the number of people that can live on the planet, whether this is ten billion or a hundred billion I have no idea, or whether this will be reached in a few decades or not for millennia.

But let's assume that one day that limit is reached, and everything that can be invented or discovered has been, societies have organised themselves to maximum efficiency, and everybody can live a happy and peaceful life. At this stage, there is no evolutionary advantage to couples having more than two children (assuming child mortality is eliminated). But some people like having lots of children (fair enough, this urge is far more ancient than the dim knowledge that we have reached some sort of neo-Malthusian equilibrium), so Nature will step in again, to ensure that even though some couples have more than two children, they will not have more than four grandchildren because some of their children will be, er, homosexual.

So there you have it, the subtle evolutionary advantages of homosexuality will always be equal and opposite to the obvious evolutionary disadvantages that gays tend not to have children, no matter whether you are looking at pre-history or the distant future.

Nulab are so mindblowingly incompetent that they can't even get a good headline out of a tax cut - see also the shambles they made of the 2% 'cut' in basic rate tax (that left the lowest earners worse off); the subsequent panicked increase in the tax-free personal allowance (a £2.7 billion bung to try and hang on to Crewe and Nantwich, which failed); the cut in CGT from 40% 'down' to 18% which left entrepreneurs worse off (followed by a bodged reintroduction of Retirement Relief). As it happens the true overall average CGT rate was probably closer to 18% than 40% anyway, once you take into account indexation allowance and taper relief, but that's details, and not what the headlines said.

What a bunch of morons. Of course they don't understand economics, let alone free-market economics - they're socialists - but they can't even put a positive spin on a f***ing tax cut, Jeez.

There is a slow gradual transition from agricultural, pastoral societies to 'civilised' (i.e. more complex and organised) societies. Organisation requires 'leaders'. Natural leadership skills aka charisma works fine in small groups, but without mass media, there has to be a hierarchy of administrators or politicians or priests (all the same thing, really, and all in it for The Greater Good as well as naked self-interest). Advance requires technology and science; an organised society needs artists and craftsmen to celebrate the achievements of The Great And Good*. A society that advances needs an army to protect itself from less successful ones.

Now, if you're an Average Joe with your own family to look after, you'll have little time or enthusiasm for all this (even though in the grander scheme of things, they benefit you). So Nature needs to have some people who don't have to worry about kids. On the one hand, Nature could have just arranged it so that more people were infertile, but this would defeat the object, and humans would die out - far better to have slightly too many children and for some of these to be gay (as covered in Part 4).

Furthermore, Nature is a kindly old soul - it would be downright cruel to have straight but infertile people. So those rôles - as warriors, administrators, artists, scientists etc - are ideally suited for gay people. They can still form happy relationships but their lives aren't bogged down with the minutiae of daily life.

Wednesday, 6 August 2008

I normally let each heat run for a week, but Lickey End, submitted by Rachel Miller, is so far ahead that I am going to call it early and I'll squeeze in a final-final-honestly-no-more-submissions-please-round, closing this weekend, after which it's The Grand Final.

As Tories go, I actually quite like Philip Hammond, who points out that floating a stamp duty suspension without confirming it one way or the other had "created a significant incentive for people to delay the purchase of a property in the hope of avoiding the payment of stamp duty on the transaction. The uncertainty can only undermine the market further, reducing the volume of transactions when they are already at historic lows."

Good logic. But read on ...Mr Hammond said the government should adopt shadow chancellor George Osborne's "fully-funded" proposal, announced last October, to lift the stamp duty threshold for first-time buyers to £250,000. "This would lift nine out of ten first-time buyers out of stamp duty altogether and provide badly needed assistance to a group who are finding it increasingly difficult to enter the market."

Sorry, he's spoiled it all again now. The last thing that a first-time buyer should be doing is 'entering the market'. My advice to them, FWIW, is wait another couple of years and wait until prices have bottomed out.

OK. We've moved on from the hunter-gathering, the gays are still with us, and humans have discovered agriculture and have become settlers.

The natural order seems to be that things belong to families (rather than to individuals or groups), so children don't inherit stuff so much as the older ones just drop out of the picture. But there's a limit on what you can inherit (obviously) and there is also a limit on the amount of new land that you can adapt for agriculture (it takes ages to get the trees to grow, to dig the ditches, to get the soil fertilised etc), which in turns set an upper limit for how quickly the population can increase.

To ensure the survival of the human race, every heterosexual couple has to have at least two children, so there is an evolutionary advantage to having more (if you have less, you will die out). But the more children any particular human couple has, the more likely those children and grandchildren are going to waste time, energy and indeed lives fighting between themselves over who gets what.

So Nature slams on the brakes; it has a mechanism whereby, the more baby boys a woman has had, the more likely it is that the next baby boy will be gay - hooray! The number of descendants, but the survival chances of her grandchildren are even more secure (as I explained in Part 3).

I ran up the TV licence people to tell them my new address, pressed all the proper options and got through to a bloody computer, of course.

Ah well. The computer asked me for my TV licence reference number. I read it off slowly and clearly, leaving gaps between the digits and saying "Zero" instead of 'Oh". The computer read it back, that was fine, "Say yes to confirm", jolly good, next challenge, the postcode.

I dictated my postcode slowly and clearly, as before, no good, "Computer says no". I tried again even slower and clearer. Still no good. At the third attempt I thought "F*** this" and rattled out my postcode as fast as humanly possible (in well under a second). "Thank you" said the computer and read it back correctly.

Tuesday, 5 August 2008

Damn. I spend a day out enjoying the North Devon drizzle, and it all kicks off behind my back.

As I have said often enough, The Goblin King's "sixty three consecutive quarters of economic growth" (the first eighteen were under the previous Tory gummint, of course) were based on an illusion of wealth caused by spiralling house prices* and artifically low interest rates**.

All bubbles burst eventually, and once they do, there is nothing you can (or should) do to stop it. I listed Nulab's first four desperate, and futile, attempts here. Throws five and six were ... on the same day ... £3 billion more for Northern Rock and they're seriously considering nicking the Tories' f***ing stupid plan to axe Stamp Duty Land Tax for first time buyers (which they in turn took from that economics genius Krusty Allsopp, 'nuff said), which will cost future taxpayers another few £ billion (the 'tax cut' won't be mirrorred by a much welcomed spending cut, it'll just be added to gummint borrowings, in other words, today's tax cut is a future tax hike)***.

To recap: house prices are falling at 1% to 2% a month (total housing stock falling in value at about £10 billion per week), but turnover is still shrinking rapidly, so who in his (or her) right mind seriously believes that a further 1% reduction in price will bring buyers flooding back to the market?****

At least Normant Lamont had the decency to throw in the towel after losing £2 billion in one day.

The delicious irony is, these bastard MPs are all second-home owners, so they are panicking on a purely personal level, as well as on a political level.

* The Goblin King:"I think the important thing is that over the last 10 years people in the South have seen their living standard rise substantially. They've seen their net wealth rise even faster than their incomes."

*** I'm not disputing that Stamp Duty Land Tax is, taken in isolation, a totally evil wealth/property tax, but my view is that it should be rolled into Land Value Tax rather than being scrapped, that's a political thing.

**** There's a fine article in The Times pointing out that the Tories tried the same wheeze in 1991 and it achieved nothing, via enuii at HPC.